American consumers save well over $3 billion every year through the use of coupons. Coupons help people save money and can encourage them to try new products or pick up products they would otherwise leave on the shelf. Coupons aren’t just for extreme couponers, and today’s coupons don’t only look like magazine clippings. They also take the form of mobile offers sent straight to our phones that anyone can conveniently use. As a convenience store owner or manager, you may wonder whether coupons have a place in helping you grow your sales. In this article, we’re going to look at a case study of how coupons from our BR Club loyalty program increased Skittles sales at convenience stores. You may be surprised by just how much of an impact coupons can have.
Convenience Store CouponsYou may associate coupons with shopping at the grocery store and wonder whether there’s really any place for them in a convenience store. After all, convenience stores tailor to customers who are in and out quickly, and are looking for convenience. Does someone who stopped in for a coffee, a bag of chips, and a soda care about using a coupon? The answer is yes! Coupons can certainly influence the purchasing decisions of anyone shopping for items at convenience stores and many other types of stores. One survey found that two-thirds of consumers have purchased a product they weren’t planning to buy otherwise because they discovered a coupon for it. Whether shopping online or in a store, knowing you have a coupon for an item puts that item into your mind and may prompt you to add it to your basket. It’s important to note that coupons come in many forms, and consumers don’t interact with all coupons the same way. For example, a manufacturer’s coupons in the newspaper or a magazine will likely go unnoticed by someone who isn’t seeking them out. Digital coupons, on the other hand, are accessible for anyone with a computer or smartphone. Advertising coupons inside of the store is another way to garner attention right before the customer selects what item to purchase. A recent article from Convenience Store News pointed out that c-stores can more effectively connect with their customers using digital coupons since there are 135 million digital coupon users in the United States. The article also points out that many of the c-stores that are currently taking advantage of digital couponing are tying these coupons in with a loyalty program. These programs can create even more of a sense of exclusivity, which is a major part of what makes customers love coupons in the first place. What categories of c-store coupons perform the best? One study found that customers redeemed the most coupons at their local convenience stores for beverages (led by energy drinks), followed by food and candy. These are all c-store staples, so getting customers to redeem coupons to buy more of these items is one of the best ways to increase convenience store sales.
A Skittles Case StudyNow that we’ve talked about the effectiveness of coupons in general and for convenience stores in particular, let’s focus in on a case study from early 2019. This case study highlights the general coupon knowledge we’ve been discussing with some concrete numbers. Let’s start by establishing our baseline for this case study. In January 2019, 184 stores that use the BR Club loyalty program sold Skittles products to customers who came in. These Skittles products included several different UPCs, including original, sour, wild berry and tropical flavors — the four most popular Skittles flavors, according to Ranker, a website which allows consumers to rank their preference for various products. These UPCs also include the classic, smaller sizes as well as the larger share size. Together, the 184 stores that sold Skittles sold a total of 2,698 products, totaling $3,342.79 in revenue. We then ran a coupon for Skittles in February with three goals: 1. Increase the number of stores in the BR Club network that sell Skittles, 2. Increase the total volume of Skittles products sold at BR Club locations, 3. Increase the volume of Skittles products sold at stores that were already selling Skittles (this last data point excludes stores that hadn’t been selling Skittles prior to the coupon). In order to make customers aware of the Skittles coupon, we advertised the coupon on the customer facing screens of the stores’ POS Systems. This way customers could see the coupon during check out, perhaps the most influential and captivating time to advertise to a store’s customers. We also sent the coupon straight to BR Club members via SMS message. We then tracked Skittles sales in February to see if we achieved our three goals. The bottom line? Our stores saw a major upturn in Skittles sales due to the BR Club coupon. Let’s break it down in more detail, looking at each of our metrics.
1. Number of Stores That Sold SkittlesFirst of all, thirty four (34) BR Club stores that hadn’t sold any Skittles in January, sold Skittles in February because of the coupon. This resulted in a total of 218 stores selling Skittles as opposed to 184 in January, an 18% increase. This number was even more impressive for one particular UPC — the tropical Skittles flavor 2.17-ounce bag. Thirty eight (38) stores that hadn’t sold any of this UPC the month before sold them in February, thanks to the coupon. It may be easy to write off the efficacy of a coupon if customers consistently bought a product, regardless of whether they had a coupon. However, when a store that hasn’t sold a product recently (or has never sold that product before) notices a product suddenly flying off the shelves, it’s easy to see that the coupon made a real difference.
2. Total Number of Skittles Products SoldIf you’re unconvinced by the amount of new stores selling Skittles, then you may be more interested in the increase in the total number of Skittles products sold. The 218 stores that redeemed coupons in February sold vastly more Skittles products in February than in January. The number of Skittles products sold at these stores jumped from 2,698 to 6,671. That’s an amazing 147% increase. In other words, our BR Club stores sold nearly 2.5 times more Skittles products in February than they had in January. Considering the fact that candy is one of the six product categories that make up the vast majority of convenience stores’ sales, an upturn in revenue from candy sales is a win for the store’s success overall.
3. Number of Skittles Products Sold (excluding stores that were not already selling Skittles in January)Now that we’ve shown the increase in total Skittles sales due to the BR Club Skittles coupon, what if we remove stores from the data set that weren’t already selling Skittles prior to the February coupon? Remember, in bullet point 2 we got a big boost in sales from stores that were selling zero Skittles in January who just began selling Skittles in February. After all, there were 38 more stores selling Skittles in February than in in January due to the coupon. How impressive would it be if we even got a big lift in Skittles sales at stores that were already selling skittles? The 184 stores that were already selling Skittles UPCs in January sold 5722 Skittles products in February. That’s an increase of 112% from the 2698 Skittles products they sold in January. Also, a reminder that there are three less days in February than in January. That means these dramatic increases in Skittles sales happened in three less days of business!
How Can We Use This Information?So, now that we’ve seen the evidence from this case study, what does it mean for your c-store? Amidst the convenience store tips and tricks for growing your sales, don’t overlook the power of the coupon. If delivered in a way consumers can conveniently use, coupons can have a profound effect on individual consumers’ buying decisions and on your sales as a whole. According to Investopedia, offering coupons to customers can help you:
- Bring in new customers to your store
- Launch new product lines
- Clear out overstocked or unwanted inventory
- Prompt customers to try a new brand
- Encourage repeat business